The Euro is drifting lower going into the weekly close. Next week, economic data and events may see EUR/USD and EUR/GBP resistance and/or support levels tested again.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/USD price trend may soon reverse higher despite the fact traders remain net-long.
After hitting a multi-month high of 0.8645 at the start of the week, EUR/GBP has moved sharply lower as Sterling grabbed a bid. The CCI indicator showed the pair to be extremely overbought on Monday and the subsequent sell-off has now taken the pair back into neutral territory. All three simple moving averages are in play and a break below the 50-day sma could see EUR/GBP test 0.8550. Below here historical support is seen on either side of 0.8500. A prior cluster of highs around 0.
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